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Want to Retire Early? Here Are 5 Things to Start Now to Make it Possible.

By Maridel Reyes

  • PUBLISHED August 07
  • |

For most people, gracefully exiting the workforce 10 years or even decades earlier than the usual age of 65 is a common fantasy.

But is it within your reach? “It’s feasible for everyone, with planning and focus,” says Marion G. Cuff, a certified financial planner at the Grace Financial Group in Sparta, N.J. And if you’re around the age of 55, there’s a possibility that you could end up retiring earlier than you planned due to outside circumstances, so it’s smart to strategize accordingly.

“I tell clients, if you want to retire early, put $100 away when you are 21 into a 401(k), Roth IRA or IRA retirement account,” she says. “Even if you don’t know what you’re doing, let it roll and put it into an IRA or a Roth IRA. That’s how you get to retire early. Start early, in small amounts.”

But even if you’re well past your twenties, early retirement is possible if you follow these steps:


Figure out your current spending. It’s all about cash flow. “The first thing I do with new clients is to get a detailed account of their spending,” says Cuff. What are the basic expenses you need to pay to live your life? You may be shocked to find that you spend $20 a week on coffee or $300 per month on clothing. “Until you know how much you spend per month, you don’t know if you have extra money or if you need to cut back.”


Scout out your retirement expenses. Imagine your ideal retirement scenario. Do you want to spend your golden years traveling? Do you intend to move to a different state? Will your house be paid off? Look at the real estate listings where you want to retire, and calculate the cost of the new home, taxes and other fixed living expenses in the new neighborhood. Create a mock retirement budget and compare it with your current spending.


Save where you can. You’ve read the stories about people who packed a peanut butter sandwich for lunch every day or never took a vacation so they could retire 20 years early. Saving doesn’t need to be taken to that extreme. “Don’t stop doing the things you love because you’re worried you don’t have enough money for retirement,” Cuff says. “Life is about balance. Don’t stifle your soul.”


Get advice. Find a financial advisor you trust, one who knows your situation and who really hears you, suggests Cuff. The right one will help you understand how your money should be allocated and how to take money out of your accounts while minimizing penalties. “A lot of people have money, but they don’t understand what the money can do for them,” she says. “No matter how much they have, they think that it’s not enough. But a half a million dollars in retirement savings can carry you a long time if the investments are well set up, just by the way you’re taking the money out of the accounts.” Compare all the ways you can invest your money, including CDs, high yield savings and money market accounts you use for your long- and short-term savings in retirement.


Consider working part-time. Early retirement doesn’t have to mean stopping work altogether. Cuff asks clients about their passions and hobbies. This might be the time to pursue them as businesses or as second careers. Starting your own business not only keeps you busy but also can net you a little extra income, so you don’t have to dip into your retirement accounts. One place to start is SCORE, a not-for-profit that helps retirees start their own businesses.

Maridel Reyes is a journalist based in New York. Her work has appeared in Forbes, Bloomberg Businessweek, the New York Post, USA Today and the Boston Globe.

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